Just when the eurozone governments thought it could not get worse for Europe's single currency, it did.

Shell-shocked EU finance ministers meeting in Brussels on Saturday were already reeling from the worst Franco-German rift for over 20 years and a fractious failure to resolve the problems that have brought Greece, and the euro, close to the brink.

But then a new bombshell hit as a joint report by the EU and the International Monetary Fund (IMF) warned that, without a default, the Greek debt crisis alone could swallow the eurozone's entire €440 billion bailout fund - leaving nothing to spare to help the affected banks of Italy, Spain or France.

An EU already rocked by divisions between France and Germany over how to increase the "firepower" of the European Financial Stability Facility (EFSF) in order to save the wider eurozone from Greek contagion now faced the prospect of losing it all in one go.

The FT reports that, as differences in interest rates paid by governments in the eurozone widen, businesses in weak economies are seeing their borrowing costs surge. Multinational firms can usually find a way around this, but small businesses in countries like Greece, Italy, and Spain have to pay very high interest rates for loans (if they can get the money at all). Their German counterparts, meanwhile, gain a competitive edge by being able to finance at cheaper rates. This is putting a huge political strain on the system as a whole:

"David Riley, head of sovereign ratings at Fitch Ratings, said: “The fragmentation is getting worse. If this trend gains even greater momentum we’ll face a fundamental reordering of the eurozone. It undercuts the whole rationale of the euro, and could eventually make it easier for it to break up.”"

This is exactly the opposite of the way an economic system is supposed to work. Interest rates should be low when there is no growth or a depression, and they should be high when economic activity is robust. Europe has now achieved exactly the reverse. Business and consumers in prosperous Germany have extremely low interest rates and can borrow freely. Companies in snake-bit countries like Italy and Greece face very high interest rates, even if their own business is sound and their prospects are good.